Dollar Holds Near Two-Month High as Oil Shock Revives Fed Rate Bets

The US dollar remained close to a two-month high on September 28 as higher oil prices and renewed geopolitical tension pushed investors toward the greenback and reassessed the Federal Reserve's next policy steps. The dollar index was around 101.15, while EUR/USD traded near 1.1379 and GBP/USD near 1.3232. The dollar was on track for a September gain of about 1.7%, according to Reuters. The main catalyst was the renewed US-Iran standoff and its impact on energy markets. Rising crude prices can lift inflation expectations, potentially keeping US interest rates higher for longer. The market is also entering a data-heavy week. Investors are watching the August PCE inflation report on September 30 and the September employment report on October 2 for evidence about the strength of demand and the persistence of price pressures. For currencies, the combination of higher energy costs and firm Treasury yields is important because it can support the dollar while increasing pressure on economies that are more exposed to imported energy. MarketMindFX View: The 101 area remains an important reference for the dollar index. Upcoming US inflation and employment data could determine whether the recent dollar advance continues or loses momentum. SEO Title: Dollar Holds Near Two-Month High as Oil Boosts Fed Rate Bets Meta Description: The US dollar stays near a two-month high as oil prices and Fed rate expectations shape the FX market. Keywords: US dollar, DXY, Federal Reserve, oil prices, forex news, EUR/USD, GBP/USD Image Credit: Trading Floor at the New York Stock Exchange by Scott Beale, Wikimedia Commons, CC BY-SA 4.0. Source: Reuters and Investing.com, September 28, 2026. MarketMindFX analysis.